The magic number is 2.2.
That's the threshold for how many times a customer must patronize a business before beginning to feel a sense of loyalty. So says Surkus founder and chief executive Stephen George, whose L.A.-based company launched in 2014 to help companies expand their marketing and build loyal customers. Surkus is now rolling out a new product geared toward "hyperlocal" businesses with fewer than 20 locations.
Surkus Local aims to drive users to small businesses in their area. "I want to see 10 places within 10 minutes of walking," says George. The product will strive to incentivize traffic to local businesses with a tiered rewards program. The basic idea is that users on the platform will receive a small discount on their first visit to a registered business, then larger discounts for the second and third visits to get them over that 2.2 hump. In addition to cash discounts, businesses can customize the rewards.
In exchange for driving a customer to a business, Surkus Local will take a 20% revenue share of the first three visits, then 10% for every future visit. George says the pricing model aligns with the transition from building loyalty to retaining customers. Turning new customers into return customers is what Surkus Local sees as its job; building lifetime loyalty is something that the businesses can do better. Pricing is designed to be sustainable for the businesses, based on their typical marketing costs and profit margins.
Stephen George is CEO of Surkus, which is launching its new Surkus Local product this month
Surkus Local will launch with select food and beverage retailers in Koreatown, Downtown L.A. and Hollywood. It will be available later this month on iOS.
George describes the new product as a natural evolution of Surkus' growth and his own career. The chief executive was formerly employee #5 at Groupon.
"We launched Groupon to give businesses a performance-based platform to acquire customers. Surkus is an evolution of that: customer acquisition, but also customer loyalty on top of that," he says.
Surkus, which has raised over $20 million, began with a focus on helping companies big and small market themselves with in-person events and customer experiences. The idea was to streamline that process, which could be expensive and require several vendors, into an affordable one-stop shop. Surkus' clients, whether big companies like Samsung or local shops, would ask attendees to complete certain brand-building activities, like posting on social media or leaving product reviews, in exchange for the experiences, which were often free.
That model had limitations. Companies would host such events only every so often, so about a year and a half in, Surkus grew its offering to help companies market themselves digitally. Businesses would send products to Surkus users in exchange for their reviews, feedback, and user-generated content.
But just as the events-focused model had its limits, so did the digital angle. "Not every business has a product they want to ship to you," George says. He highlights the approximately 15 million businesses in the U.S. making under $500,000 in annual revenues, often with little digital presence.
So, in late 2019, the company began building out Surkus Local. George sees a through-line from the in-person experiences of the business' first iteration to the hyperlocal connectivity that Surkus Local is trying to generate.
"There's a whole different connection you can build in person. We try to do that by telling the business' story, showing who runs it, what they're proud of," George says. "We try to start that connection." He describes wanting to enable the experience of a local coming into her favorite hidden gem, where the owner knows her name and offers her a free coffee.
George thinks Surkus Local will be helpful to businesses even if they must limit their foot traffic due to the coronavirus pandemic.
"If they have a digital presence side, great, we can drive consumers there," he says. "We want to focus on the core of what makes this small business unique – that storytelling, that personal engagement. If it has to adapt digitally in the meantime, we can allow for that."
With an office in the UAE in addition to its L.A. headquarters, the company hopes to expand internationally. But first it plans to expand by sector. In addition to food and beverage businesses, it will also eventually target fashion and beauty and health and wellness companies.
For now, with a growing waiting list of users and L.A. businesses onboarding, Surkus Local will focus on helping Angeleno retailers get past that magic number.
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Visitors to L.A. – or locals looking for a fun reason to leave their apartments – can scroll the interactive map on a browser or download the app.
Image courtesy of the L.A. Tourism Dept.
The “Discover Los Angeles” map can be broken down by neighborhood or by a series of “guides,” which all feature as part of the larger promotional campaign roll-out known as the Explorer’s Guide to L.A
Atlas Obscura and the Tourism Department also published a hardcover edition of the Explorer’s Guide, along with several other speciality breakout guides, including the Meeting Planners Guide, artistic Visitor’s Map and, for those with more expensive tastes, the L.A. Luxury Guide to the city’s pricier pursuits. The paper versions of the guides have QR codes for travelers to scan and take information with them on the go.
This year’s collaboration with Atlas Obscura gives the Tourism Department’s previous guide a much-needed update – it was previously a whopping 136-page PDF document created in 2020.
The Explorer’s Guide includes a mix of places you’d expect to see on the map, like Griffith Park and the museum at the La Brea Tar Pits. It also has some unlikely spots sourced from Atlas Obscura’s network of local explorers who recommended their favorite places to visit: the Palos Verdes Peninsula, Venice Canals or the Watts Towers, a stunning, monumental public art exhibit of mosaic steel towers that was built by one Italian immigrant over a 34-year period.
30 neighborhoods are discussed in the guide, from classic tourist destinations like Hollywood and beach cities like Santa Monica and Venice to lesser-known but still exciting enclaves like Leimert Park, Frogtown and Little Ethiopia. There’s also several maps for specific interests – taqueria lovers will find new spots to nosh with the taco map, and there’s also a map of the Downtown Arts District, spots to stargaze and sports venues.
“For myself and the writers and editors on this project, many of them L.A. natives, getting to write and curate the official visitors guide to the city of L.A. was an absolute dream,” Atlas Obscura co-founder Dylan Thuras said in a statement. “We hope that these guides will inspire all the curious travelers arriving in L.A., to try new things, as well as providing new adventures for longtime L.A. residents. There is really no limit to what L.A. has to offer.”
